Australia's national competition, consumer, fair trading and product safety regulator ACCC has today commenced civil proceedings in the Federal Court against four suppliers and three senior executives for alleged price fixing while supplying fresh vegetables to ALDI, in breach of Australia's cartel laws.
According to the ACC, the alleged cartel conduct involved price fixing in the supply of fresh produce, including broccoli, cauliflower, iceberg lettuce, cucumber, Brussels sprouts, and zucchini, to ALDI stores in New South Wales, Victoria, and Queensland between 2018 and 2024.
The ACCC alleges cartel conduct by each of Perfection Fresh Australia, Hydro Produce (Aust), Veli Velisha Fresh Produce, and Velisha National Farms, along with its Director and Chief Executive, Catherine Velisha, and its Senior Sales Manager, Kaushik Vora, as well as M. Fragapane & Sons, and its General Sales Manager, Roberto Nave.
"Cartel conduct, whether by coordinating prices or agreeing on terms of bids with competitors, is anti-competitive, and is illegal," ACCC Chair Gina Cass-Gottlieb said. "Businesses acting together instead of competing can drive up prices and harm consumers, while disadvantaging other businesses that are seeking to compete fairly."
"In this instance, we allege that price fixing conduct involving some essential household vegetables took place across three states," Ms Cass-Gottlieb said. "Protecting competition in our fresh food supply chains is extremely important to drive price competition for the benefit of Australian consumers."
The ACCC alleges that on 28 occasions, two or more of the suppliers made, or attempted to make, arrangements or understandings that had the purpose, effect, or likely effect of fixing, controlling, or maintaining the price of broccoli, cauliflower, iceberg lettuce, cucumber, Brussels sprouts, or zucchini.
The ACCC also alleges that on 48 occasions, one or more of the suppliers then submitted prices to ALDI in accordance with these arrangements or understandings. "The ACCC continues to prioritise investigating allegations of cartel behaviour and will bring enforcement action where appropriate," Ms Cass-Gottlieb said.
The ACCC is seeking declarations, civil penalties, compliance orders, and costs against the businesses, and declarations, civil penalties, disqualification orders, non-indemnification orders, and costs against the individuals.
Background
Perfection Fresh Australia Pty Ltd is a fresh produce wholesaler based in New South Wales. It is the second-largest fresh vegetable supplier in Australia, providing a broad range of produce, including cauliflower, broccoli, iceberg lettuce, Brussels sprouts, broccolini, and celery, to all states.
Hydro Produce (Aust) Pty Ltd is a fresh produce wholesaler and grower, also based in New South Wales, with farms in every state. It supplies a wide range of produce, including cauliflower, broccoli, iceberg lettuce, kale, sweet potato, and celery, to all states.
Veli Velisha Fresh Produce Pty Ltd was a grower and supplier of fresh produce based in Victoria. It ceased operations around June 2019 when its business was sold to Velisha National Farms. Veli Velisha supplied various produce, including cauliflower, cucumber, broccoli, iceberg lettuce, zucchini, spring onion, and Brussels sprouts.
Velisha National Farms Pty Ltd is a fresh produce wholesaler and grower of a limited range of produce based in Victoria. It supplies its produce to Victoria, New South Wales, Queensland, South Australia, and Tasmania, offering cauliflower, cucumber, broccoli, iceberg lettuce, zucchini, and spring onion.
M. Fragapane & Sons Pty Ltd, trading as Fragapane Farms, is a fresh produce grower and supplier based in Victoria. It supplies cauliflower, broccoli, iceberg lettuce, and celery to Victoria, New South Wales, Queensland, South Australia, and Western Australia.
The supply of fresh produce to ALDI is divided into three categories: Agile, Standard, and Fixed cost. Agile pricing is the most flexible, requiring suppliers to submit weekly quotes. ALDI uses agile pricing for vegetables such as broccoli, cauliflower, and iceberg lettuce. The price-fixing allegations in this case primarily concern agile supply.
